EXHIBIT 4.4
AMBAC ASSURANCE CORPORATION
NOTE GUARANTY INSURANCE POLICY
POLICY NO. AB0891BE
Insured Party: The Indenture Trustee (as defined herein) for the
benefit of the Holders (as defined herein) of the Triad
Automobile Receivables Trust 2005-A Asset-Backed Class A
Notes, issued pursuant to the Indenture.
Insured Obligations: To the extent set forth herein, the
aggregate interest on and the aggregate outstanding
principal balance of all Class A Notes owned by Holders,
such principal amount not to exceed in the aggregate
$1,104,000,000.
Policy Claim Amounts: (i) With respect to each Distribution Date, the excess,
if any, without duplication, of (a) the Scheduled
Payment minus (b) the sum of, without duplication: (w)
all amounts of Available Funds for the related
Collection Period, (x) Additional Funds Available, if
any, for such Distribution Date, (y) all other funds on
deposit in the Collection Account, the Lockbox Account,
the Spread Account and any other Trust Accounts
available for payment of Scheduled Payments on the Class
A Notes on such Distribution Date and (z) any other
amounts available pursuant to the Basic Documents to pay
the Scheduled Payments on such Distribution Date, in
each case to the extent available in accordance with the
priorities set forth in the Indenture and the Sale and
Servicing Agreement, and (ii) with respect to any
Preference Payment Date, Preference Amounts; provided,
however, that the aggregate amount of all such
Preference Amounts shall be subject to the limitations
in such definition; provided, further, that in no event
shall the aggregate amount payable by the Insurer under
this Policy exceed the Maximum Insured Amount.
For consideration received, AMBAC ASSURANCE CORPORATION, a Wisconsin
domiciled stock insurance corporation ("Ambac" or the "Insurer"), in
consideration of the payment of the insurance premium payable with respect
hereto, hereby unconditionally and irrevocably guarantees, subject only to (i)
proper presentation of a Notice in accordance with the terms of this Note
Guaranty Insurance Policy (together with each and every endorsement, if any,
hereto, the "Policy") and (ii) the terms of the Policy, the payment to, or at
the direction of, the Indenture Trustee, for the benefit of the Holders of the
Insured Obligations, that portion of the Policy Claim Amounts which are Due for
Payment but are unpaid by reason of Nonpayment.
1. Definitions.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Insurance Agreement or, if not defined therein,
in the Sale and Servicing Agreement, or, if not defined therein, in the
Indenture, without giving effect to any subsequent amendment or modification
thereto unless such amendment or modification has been approved in writing by
Ambac. For purposes of the Policy, the following terms shall have the following
meanings:
"Affiliate" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Auto Loan Purchase and Sale Agreement" shall mean any agreement between a
Third Party Lender and Triad relating to the acquisition of Receivables from a
Third Party Lender by Triad.
"Bankruptcy Code" shall mean Title 11 of the United States Code.
"Basic Documents" shall mean the Sale and Servicing Agreement, the
Certificate of Trust, the Trust Agreement, the Purchase Agreement, the Insurance
Agreement, the Indenture, and all other documents and certificates delivered in
connection therewith.
"Business Day" shall mean a day other than a Saturday, a Sunday or other
day on which commercial banks located in the states of Delaware, California, or
New York are authorized or obligated to be closed.
"Certificate of Trust" shall mean the certificate of trust of the Issuer
substantially in the form attached as an Exhibit to the Trust Agreement.
"Class A Notes" shall mean, collectively, the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.
"Class A-1 Notes" shall mean the Class A-1 3.30% Asset Backed Notes,
issued pursuant to the Indenture and substantially in the form attached as an
Exhibit to the Indenture.
"Class A-2 Notes" shall mean the Class A-2 3.79% Asset Backed Notes,
issued pursuant to the Indenture and substantially in the form attached as an
Exhibit to the Indenture.
"Class A-3 Notes" shall mean the Class A-3 4.05% Asset Backed Notes,
issued pursuant to the Indenture and substantially in the form attached as an
Exhibit to the Indenture.
"Class A-4 Notes" shall mean the Class A-4 4.22% Asset Backed Notes,
issued pursuant to the Indenture and substantially in the form attached as an
Exhibit to the Indenture.
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"Collection Account" shall mean the account designated as such,
established and maintained pursuant to Section 5.1 of the Sale and Servicing
Agreement.
"Collection Period" shall mean, (i) with respect to the First Distribution
Date, the period beginning on the close of business on April 30, 2005 and ending
on the close of business on May 31, 2005, and (ii) with respect to each
subsequent Distribution Date, the period beginning on the opening of business on
the first day of the immediately preceding calendar month and ending on the
close of business on the last day of the immediately preceding calendar month.
Any amount stated "as of the close of business on the last day of a Collection
Period" will give effect to the following calculations as determined as of the
end of the day on such last day: (i) all applications of collections and (ii)
all distributions.
"Dealer" shall mean a dealer who sold a Financed Vehicle and who
originated and assigned the respective Receivable to Triad under a Dealer
Agreement or pursuant to a Dealer Assignment.
"Dealer Agreement" shall mean any agreement between a Dealer and Triad
relating to the acquisition of Receivables from the Dealer by Triad.
"Dealer Assignment" shall mean, with respect to a Receivable, the executed
assignment executed by the Dealer conveying such Receivable to Triad.
"Depositor" shall mean Triad Financial Special Purpose LLC, a Delaware
limited liability company.
"Distribution Date" shall mean, with respect to each Collection Period,
the 12th day of the following Collection Period, or, if such day is not a
Business Day, the immediately following Business Day, commencing June 13, 2005.
"Due for Payment" shall mean, with respect to any Policy Claim Amounts,
such amount as is due and payable pursuant to the terms of the Indenture.
"Final Scheduled Distribution Date" shall mean, with respect to (i) the
Class A-1 Notes, the June 2006 Distribution Date, (ii) the Class A-2 Notes, the
January 2009 Distribution Date, (iii) the Class A-3 Notes, the March 2010
Distribution Date and (iv) the Class A-4 Notes, the June 2012 Distribution Date.
"Financed Vehicle" shall mean an automobile or light-duty truck, together
with all accessions thereto, securing an Obligor's indebtedness under the
respective Receivable.
"First Distribution Date" shall mean June 13, 2005.
"Holder" shall mean any registered owner of a Class A Note (other than a
Triad Party).
"Indenture" shall mean that certain Indenture, dated as of May 26, 2005,
by and between the Issuer and the Indenture Trustee.
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"Indenture Trustee" shall mean JPMorgan Chase Bank, N.A. not in its
individual capacity but as trustee under the Indenture, and its successors and
assigns in such capacity.
"Insurance Agreement" shall mean that certain Insurance and Indemnity
Agreement, dated as of May 26, 2005, among the Insurer, the Issuer, Triad, as
Seller and Servicer, the Depositor and the Indenture Trustee, in regard to the
Class A Notes, as such agreement may be amended, modified or supplemented from
time to time.
"Insured Payments" shall mean, (i) with respect to any Distribution Date,
the aggregate amount actually paid by the Insurer to, or at the direction of,
the Indenture Trustee in respect of the Policy Claim Amounts for such
Distribution Date and (ii) the aggregate amount of any Preference Amounts paid
by the Insurer on any given Business Day.
"Insurer" shall mean Ambac, or any successor thereto, as issuer of this
Policy.
"Interest Period" shall mean, with respect to any Distribution Date, the
period from and including the preceding Distribution Date (or, in the case of
the First Distribution Date, from and including the Closing Date) to, but
excluding, such Distribution Date.
"Interest Rate" shall mean, with respect to (i) the Class A-1 Notes, 3.30%
per annum, (ii) the Class A-2 Notes, 3.79% per annum, (iii) the Class A-3 Notes,
4.05% per annum and (iv) the Class A-4 Notes, 4.22% per annum (in the case of
the Class A-1 Notes, computed on the basis of a 360-day year and the actual
number of days in the related Interest Period and, in the case of the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes, computed on the basis of a
360-day year consisting of twelve 30-day months).
"Issuer" shall mean Triad Automobile Receivables Trust 2005-A, a Delaware
statutory trust.
"Late Payment Rate" shall mean the lesser of (a) the greater of (i) the
per annum rate of interest publicly announced from time to time by Citibank,
N.A. as its prime or base lending rate (any change in such rate of interest to
be effective on the date such change is announced by Citibank, N.A.), plus 2%
per annum and (ii) the then applicable highest rate of interest on the Class A
Notes and (b) the maximum rate permissible under applicable usury or similar
laws limiting interest rates. The Late Payment Rate shall be computed on the
basis of the actual number of days elapsed over a year of 360 days.
"Lockbox Account" shall mean an account maintained by the Lockbox Bank
pursuant to Section 4.2(d) of the Sale and Servicing Agreement.
"Lockbox Bank" shall mean, initially, Mellon Bank, N.A. and its successors
in interest, and thereafter a depositary institution named by the Servicer and
approved by the Insurer (so long as no Insurer Default has occurred and is
continuing) which provides a lockbox as part of its normal and customary
services at which the Lockbox Account is established and maintained as of such
date; provided, however, that upon the occurrence of a Servicer Termination
Event, the Controlling Party may, in its sole discretion, cause the Lockbox
Account to be established at another bank.
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"Maximum Insured Amount" shall mean $1,104,000,000 in respect of
principal, plus interest thereon calculated at the applicable Interest Rate for
the Class A Notes.
"Nonpayment" shall mean, with respect to any Distribution Date, Policy
Claim Amounts which are Due for Payment but have not been paid pursuant to the
Indenture.
"Notice" shall mean the telephonic or telegraphic notice, promptly
confirmed in writing by telecopy substantially in the form of Exhibit A or
Exhibit B, as applicable, to this Policy, the original of which is subsequently
delivered by registered or certified mail, from the Indenture Trustee specifying
the amount of any Insured Payment which shall be due and owing.
"Obligor" shall mean, on a Receivable, the purchaser or co-purchaser(s) of
the Financed Vehicle and any other Person who owes payments under the
Receivable.
"Order" shall have the meaning given such term in Section 8 hereto.
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Preference Amount" shall mean any interest on or principal of the Class A
Notes which has become Due for Payment, the Nonpayment of which would have been
covered by the Policy, and which was made to a Holder by or on behalf of the
Issuer which has been deemed a preferential transfer and recoverable, or
theretofore recovered, from a Holder pursuant to the Bankruptcy Code in
accordance with a final, nonappealable order of a court of competent
jurisdiction; provided that any Preference Amount that constitutes interest
shall be limited to the amount of interest on the outstanding principal amount
of the Class A Notes (calculated at the Interest Rate for the relevant class of
Class A Notes) that has been deemed recoverable, or has been recovered, from a
Holder and shall not, in any event, include any interest on such interest
amount; provided, further, that in no event shall Ambac be obligated to make any
payment in respect to any Preference Amount to the extent that such payment,
when added to all prior payments of Policy Claim Amounts, would exceed the
Maximum Insured Amount.
"Preference Payment Date" shall have the meaning given such term in
Section 8 hereto.
"Purchase Agreement" shall mean the Purchase Agreement between Triad
Financial Special Purpose LLC and Triad, dated as of May 26, 2005, as such
Purchase Agreement may be amended from time to time.
"Receivables" shall mean any of the motor vehicle retail installment sale
contracts, installment loan contracts or notes and security agreements listed in
Schedule A to the Sale and Servicing Agreement.
"Receivable Files" shall mean the documents relating to the Receivables
specified in Section 3.3 of the Sale and Servicing Agreement.
"Reimbursement Amount" shall mean, as of any Distribution Date, the sum of
(x)(i) all Insured Payments paid by Ambac, but for which Ambac has not been
reimbursed prior to such
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Distribution Date pursuant to Section 3.3 of the Insurance Agreement, Section
5.6 of the Indenture and Section 5.7 of the Sale and Servicing Agreement, plus
(ii) interest accrued on such Insured Payments not previously repaid calculated
at the Late Payment Rate from the date the Indenture Trustee, or any other
Person at its direction, received the related Insured Payments or the date such
Insured Payments were made, and (y) without duplication (i) any amounts then due
and owing to Ambac under the Insurance Agreement, Section 5.6 of the Indenture
and Sections 5.7(a)(vi), (vii) and (x) of the Sale and Servicing Agreement, as
certified to the Indenture Trustee by Ambac plus (ii) interest on such amounts
at the Late Payment Rate.
"Sale and Servicing Agreement" shall mean that certain Sale and Servicing
Agreement, dated as of May 26, 2005, by and among the Issuer, the Depositor,
Triad, as Servicer and Custodian, and JPMorgan Chase Bank, N.A. as Indenture
Trustee and Backup Servicer, as the same may be amended or supplemented from
time to time.
"Scheduled Payments" shall mean, with respect to any Distribution Date, an
amount equal to the sum of (a) the Class A Noteholders' Monthly Interest
Distributable Amount and the Class A Noteholders' Parity Deficit Amount for the
related Distribution Date and, without duplication, (b) if the related
Distribution Date is the Final Scheduled Distribution Date for any class of
Class A Notes, the outstanding principal amount of such Class on such date after
application of all funds available to pay principal amounts on such Class of
Class A Notes from all sources other than the Policy; provided that Scheduled
Payments shall not include (x) any portion of a Class A Noteholders' Monthly
Interest Distributable Amount or of a Class A Noteholders' Interest Carryover
Amount due to Holders because the Notice in proper form was not timely received
by Ambac, or (y) any portion of a Class A Noteholders' Interest Distributable
Amount due to Holders representing interest on any Class A Noteholders' Interest
Carryover Amount accrued from and including the date of payment of the amount of
such Class A Noteholders' Interest Carryover Amount pursuant to the Policy.
"Seller" shall mean Triad Financial Corporation, a California corporation,
and its successors and assigns.
"Service Contract" shall mean, with respect to a Financed Vehicle, the
agreement, if any, financed under the related Receivable that provides for the
repair of the Financed Vehicle.
"Servicer" shall mean Triad Financial Corporation, a California
corporation, and its successors and assigns.
"Spread Account" shall mean the account designated as such, established
and maintained pursuant to Section 5.5 of the Sale and Servicing Agreement.
"Third Party Lender" shall mean an entity that originated a loan to a
consumer or was the original assignee of a motor vehicle retail installment sale
contract from a dealer for the purchase of a motor vehicle and sold the loan or
motor vehicle retail installment sale contract to Triad pursuant to an Auto Loan
Purchase and Sale Agreement.
"Triad" shall mean Triad Financial Corporation, a California corporation,
and its successors and assigns.
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"Triad Party" shall mean any of the Issuer, the Depositor, Triad, the
Servicer, the originator, the Holder of the Residual Certificate and any of
their respective Affiliates.
"Trust Accounts" shall have the meaning assigned thereto in Section 5.1 of
the Sale and Servicing Agreement.
"Trust Agreement" shall mean the Trust Agreement dated as of April 15,
2005 among Triad, as Administrator, the Depositor and Wilmington Trust Company,
not in its individual capacity but solely as Owner Trustee, as amended and
restated as of May 26, 2005, as the same may be amended or supplemented from
time to time.
2. Payments under the Policy.
(a) Upon the presentation by the Indenture Trustee to Ambac at Ambac's
principal office in respect of the applicable Distribution Date of a duly
executed Notice, Ambac will make or cause to be made to the Indenture Trustee,
on the guarantee set forth in the first paragraph of this Policy, payment in an
amount equal to the applicable Policy Claim Amount.
(b) Amounts payable in respect of any Policy Claim Amounts due hereunder,
unless otherwise stated herein, will be distributed by Ambac to, or at the
direction of, the Indenture Trustee, by wire transfer of immediately available
funds. Solely the Indenture Trustee on behalf of the Holders shall have the
right to make a claim for an Insured Payment under this Policy.
(c) Ambac's payment obligations hereunder with respect to particular
Policy Claim Amounts shall be discharged to the extent funds equal to the
applicable Policy Claim Amounts are paid by Ambac to, or at the direction of,
the Indenture Trustee in accordance with the Indenture Trustee's requests,
whether or not such funds are properly applied by the Indenture Trustee.
Payments of Policy Claim Amounts shall be made only at the time set forth in
this Policy, and no accelerated Insured Payments shall be made except to the
extent that Ambac has specified an earlier date for payment at its sole option.
This Policy does not insure against loss of any prepayment or other acceleration
payment which at any time may become due in respect of any Insured Obligations,
other than at the sole option of the Insurer, nor against any risk other than
Nonpayment, including failure of the Indenture Trustee to pay any Policy Claim
Amounts or Scheduled Payments due to Holders.
(d) Notwithstanding anything to the contrary set forth herein, in no event
shall the aggregate amount paid by Ambac hereunder exceed the Maximum Insured
Amount hereunder.
3. Presentation of Notice of Non-Payment and Demand.
(a) Notwithstanding any other provision of this Policy but subject to
Section 8 hereof with respect to Preference Amounts, the Insurer will pay any
Policy Claim Amounts payable hereunder other than with respect to Preference
Amounts to, or at the direction of, the Indenture Trustee no later than 12:00
noon, New York City time, on the later of (i) the Distribution Date on which the
related Policy Claim Amount is due for payment under the Indenture or (ii) the
second Business Day following actual receipt in New York, New York on a Business
Day by the Insurer of a Notice in the form attached as Exhibit A, appropriately
completed and executed by the Indenture Trustee; provided that, if such Notice
is received after 12:00 noon, New York City
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time, on such Business Day, it will be deemed to be received before 12:00 noon,
New York City time, on the following Business Day.
(b) If any such Notice is not in proper form or is otherwise insufficient
for the purpose of making a claim under this Policy, it shall be deemed not to
have been received by the Insurer for purposes of this Policy, and the Insurer
shall promptly so advise the Indenture Trustee in writing and the Indenture
Trustee may submit an amended or corrected Notice. If such an amended or
corrected Notice is in proper form and is otherwise sufficient for the purpose
of making a claim under this Policy, it shall be deemed to have been timely
received on the Business Day of such resubmission subject to the proviso in (a)
above.
4. Waiver. To the fullest extent permitted by applicable law, Ambac hereby
waives and agrees not to assert any and all rights and defenses, to the extent
such rights and defenses may be available to Ambac, to avoid payment of its
obligations under this Policy in accordance with the express provisions hereof.
Without limitation of the foregoing, Ambac hereby waives and agrees not to
assert any and all rights to require the Indenture Trustee to make demand on or
to proceed against any Person, party or security prior to demanding payment
under this Policy. For the avoidance of doubt, Ambac does not waive its right to
seek payment of all Reimbursement Amounts to which it is entitled.
5. Subrogation. Upon any payment hereunder, in furtherance and not in
limitation of Ambac's equitable right of subrogation and Ambac's rights under
the Insurance Agreement, Ambac will, to the extent of such payment by Ambac
hereunder, be subrogated to the rights of any Holder to receive any and all
amounts due in respect of the Insured Obligations as to which such Insured
Payment was made, to the extent of any payment by Ambac under this Policy and
Ambac will be a co-beneficiary of the Indenture Trustee's lien under the
Indenture.
6. Communications. All notices, presentations, transmissions, deliveries
and communications made by the Indenture Trustee to Ambac with respect to this
Policy shall specifically refer to the number of this Policy and shall be made
to Ambac at:
Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: Asset-Backed Securities Department Head
General Counsel - URGENT
Phone: (212) 208-3283
Fax: (212) 556-3556
or to such other address, officer, telephone number or facsimile number as Ambac
may designate to the Indenture Trustee from time to time.
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7. Nature of the Obligations. Except as expressly provided herein, the
obligations of Ambac under this Policy are irrevocable, absolute and
unconditional.
8. Termination. This Policy and the obligations of Ambac hereunder shall
terminate upon the earlier of:
(a) the date on which all of the Policy Claim Amounts have been paid in
full by Ambac to, or at the direction of, the Indenture Trustee; or
(b) the close of business on the third (3rd) Business Day after the
earlier of (a) the Final Scheduled Distribution Date that occurs last for a
class of Class A Notes and (b) the date on which all principal and interest on
the Class A Notes has been paid in full;
provided, however, that notwithstanding the occurrence of any of the foregoing
events, the Insurer shall pay any Preference Amount when due to be paid pursuant
to an Order referred to below, but in any event no earlier than the fifth
Business Day following actual receipt by the Insurer of (i) a certified copy of
the final, nonappealable order of a court or other body exercising jurisdiction
to the effect that a Holder is required to return such Preference Amount paid
during the term of this Policy because the payments of such amounts were avoided
as a preferential transfer or otherwise rescinded or required to be restored by
the Indenture Trustee or such Holder (the "Order"), (ii) an opinion of counsel
satisfactory to the Insurer stating that the Order has been entered and is final
and not subject to any stay, (iii) an assignment, in form and substance
satisfactory to the Insurer, duly executed and delivered by such Holder and the
Indenture Trustee, irrevocably assigning to the Insurer all rights and claims of
the Indenture Trustee and such Holder relating to or arising under the Indenture
or otherwise with respect to such Preference Amount, (iv) appropriate
instruments in form satisfactory to the Insurer to effect the appointment of the
Insurer as agent for the Indenture Trustee and such Holder in any legal
proceeding related to such Preference Amount, and (v) a Notice (in the form
attached as Exhibit B) appropriately completed and executed by the Indenture
Trustee (the "Preference Payment Date"); provided, further, that (I) if such
documents are received by the Insurer after 12:00 noon, New York City time, on
such Business Day, they will be deemed to be received before 12:00 noon, New
York City time, on the following Business Day, (II) the Insurer shall not be
obligated to pay any Preference Amount in respect of principal (other than the
Class A Noteholders' Parity Deficit Amount) prior to the Final Scheduled
Distribution Date for the relevant class of Class A Notes and (III) any
Preference Amount that constitutes interest shall be limited to the amount of
interest on the Outstanding Amount of the Class A Notes (calculated at the
Interest Rate for the relevant class of Class A Notes) that has been deemed
recoverable, or has been recovered, from a Holder and shall not, in any event,
include any interest on such interest amount. Such payment shall be disbursed to
the receiver, conservator, debtor-in-possession or trustee in bankruptcy named
in the Order, and not to the Indenture Trustee or the Holder directly, unless
the Indenture Trustee or the relevant Holder has made a payment of the
Preference Amount to the court or such receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order, in which case
the Insurer will pay the Indenture Trustee, or as directed by the Indenture
Trustee, to the extent of the payment of the Preference Amount, subject to the
delivery of (a) the items referred to in clauses (i), (ii), (iii), (iv) and (v)
above to the Insurer and (b) evidence satisfactory to the Insurer that payment
has been made to such court or receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Order.
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Notwithstanding the foregoing, in no event shall Ambac be obligated to
make any payment in respect of any Preference Amount (i) to the extent that such
payment, when added to all prior payments of Policy Claim Amounts, would exceed
the Maximum Insured Amount or (ii) prior to the time Ambac would have been
required to pay a Policy Claim Amount pursuant to Section 3 of this Policy.
9. There shall be no acceleration payment due under this Policy unless
such acceleration is at the sole option of the Insurer. This Policy does not
cover (i) premiums, if any, payable in respect of the Class A Notes, (ii)
shortfalls, if any, attributable to any payment of withholding taxes (including
penalties and interest in respect of any such liability) or (iii) any risk other
than Nonpayment, including the failure of the Indenture Trustee to apply,
disburse, transfer or direct Policy payments or Available Funds or other amounts
in accordance with the Indenture to Holders or to any other party.
10. Miscellaneous.
(a) This Policy sets forth the full understanding of Ambac. The Policy is
noncancelable by Ambac for any reason, including failure to receive payment of
any premium due hereunder.
(b) This Policy is issued pursuant to, and shall be construed under, the
laws of the State of New York, without giving effect to the conflicts of laws
rules thereof, as contemplated in Section 5-1401 of the New York General
Obligations Law.
(c) THE INSURANCE PROVIDED BY THIS POLICY IS NOT COVERED BY THE
PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW
YORK INSURANCE LAW.
(d) Any notice hereunder or service of process on Ambac may be made at the
address listed above for Ambac or such other address as Ambac shall specify in
writing to the Indenture Trustee.
(e) The premium of this Policy is not refundable for any reason. The
premium will be payable on this Policy on each Distribution Date as provided in
the Insurance Agreement, beginning with the First Distribution Date.
ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY
OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM
CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF
MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A
FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SHALL ALSO BE SUBJECT TO A CIVIL
PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE CLAIM
FOR EACH SUCH VIOLATION.
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IN WITNESS WHEREOF, Ambac has caused this Note Guaranty Insurance Policy
to be executed and attested this 26th day of May, 2005.
AMBAC ASSURANCE CORPORATION
By: /s/ Michael Babick
--------------------------
Name: Michael Babick
Title: First Vice President
Attest:
By: /s/ Melissa L. Velie
--------------------------------
Name: Melissa L. Velie
Title: Assistant Secretary and
Assistant Vice President
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EXHIBIT A
TO THE NOTE GUARANTY INSURANCE POLICY
Policy No. AB0891BE
NOTICE OF NONPAYMENT AND DEMAND
FOR PAYMENT OF INSURED AMOUNTS
(OTHER THAN PREFERENCE AMOUNT)
Date: _______________
Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: Asset-Backed Securities Department Head
General Counsel - URGENT
Reference is made to Note Guaranty Insurance Policy No. AB0891BE (the
"Policy") issued by Ambac Assurance Corporation ("Ambac"). Terms capitalized
herein and not otherwise defined shall have the meanings specified in the
Policy, unless the context otherwise requires.
The undersigned hereby certifies as follows:
1. It is the Indenture Trustee under the Indenture, and is acting for
the Holders.
2. The relevant Distribution Date is [date].
3. There is an amount of $_____________ with respect to such
Distribution Date, which amount is a Policy Claim Amount which is
Due for Payment.
4. The Indenture Trustee has not heretofore made a demand for the
Policy Claim Amount in respect of such Distribution Date.
5. The Indenture Trustee hereby requests the payment of the Policy
Claim Amount that is Due for Payment be made by Ambac under the
Policy and directs that payment under the Policy be made to the
Indenture Trustee to the following account by bank wire transfer of
federal or other immediately available funds in accordance with the
terms of the Policy to:_____________. (1)
6. The Indenture Trustee hereby agrees that, following receipt by the
Indenture Trustee of the Insured Payment from Ambac, it shall (a)
hold such amounts in trust and apply the same directly to the
distribution of payments in respect of the
- ----------
(1) The account number of the Indenture Trustee.
Class A Notes when due, (b) not apply such funds for any other
purpose, and (c) maintain an accurate record of such payments with
respect to the Class A Notes and the corresponding claim on the
Policy and proceeds thereof.
7. The Indenture Trustee hereby assigns to Ambac all rights, and
confirms that the Holders have assigned all rights, under the
Insured Obligations in respect of which payment is being requested
to Ambac.
ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY
OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM
CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF
MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A
FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SHALL ALSO BE SUBJECT TO A CIVIL
PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE CLAIM
FOR EACH SUCH VIOLATION.
By: _____________________________
Title: __________________________
(Officer)
A-2
EXHIBIT B
TO THE NOTE GUARANTY INSURANCE POLICY
Policy No. AB0891BE
NOTICE OF NONPAYMENT AND DEMAND
FOR PAYMENT OF PREFERENCE AMOUNT
Date: ____________
Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: Asset-Backed Securities Department Head
General Counsel - URGENT
Reference is made to Note Guaranty Insurance Policy No. AB0891BE (the
"Policy") issued by Ambac Assurance Corporation ("Ambac"). Terms capitalized
herein and not otherwise defined shall have the meanings specified in the
Policy, unless the context otherwise requires.
The undersigned hereby certifies as follows:
1. It is the Indenture Trustee under the Indenture, and is acting for
the Holders.
2. [A payment previously made in respect of the Class A Notes pursuant
to the Indenture has become a Preference Amount, as indicated by the
attached Order.]
3. The Holder of the applicable Class A Notes has certified that the
Order has been entered and is not subject to stay.
4. The amount of the Preference Amount is $___________, and consists of
interest in the amount of $___________ paid on ___________, _______,
[and principal in the amount of $___________ paid on ___________,
_______.]
5. Neither the Indenture Trustee nor the Holder has heretofore made a
demand for such Preference Amount.
6. The Indenture Trustee hereby requests the payment of the Insured
Payment be made by Ambac under the Policy and directs that payment
under the Policy be made to the Indenture Trustee to the following
account by bank wire transfer of
federal or other immediately available funds in accordance with the
terms of the Policy to:_______. (2)
7. The Indenture Trustee hereby agrees that if such Insured Payment is
made to the Indenture Trustee, following receipt of such Insured
Payment from Ambac, it shall (a) hold such amounts in trust and
apply the same directly to the Holder for payment of the Preference
Amount, (b) not apply such funds for any other purpose, and (c)
maintain an accurate record of such payments with respect to the
Class A Notes and the corresponding claim on the Policy and proceeds
thereof.
8. The Indenture Trustee hereby assigns to Ambac all rights, and
confirms that the Holders have assigned all rights, under the
Insured Obligations in respect of which payment is being requested
to Ambac.
ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY
OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM
CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF
MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A
FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SHALL ALSO BE SUBJECT TO A CIVIL
PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE CLAIM
FOR EACH SUCH VIOLATION.
By: _________________________
Title: ______________________
(Officer)
- ----------
(2) The account of the relevant receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in Order, unless the Holder or Indenture
Trustee has already paid such Preference Amount to such party, in which
case, the account of the payor.
B-2